Oracle co-CEO Mark Hurd says you need these three things to transition to the cloud

There are two types of companies that can change fast, Oracle co-CEO Mark Hurd says: Innovative startups and companies in trouble.

On the latest episode of Recode Decode, hosted by Kara Swisher, Hurd talked about his efforts to push big changes through at Oracle even though the 40-year-old enterprise company didn’t fit into either bucket. Oracle has lately directed its business more and more toward the cloud as it battles with competitors such as Workday, Salesforce and Microsoft.

“We made the decision to go at this hard three or four years ago, changing virtually everything in the company,” Hurd said. “We made the decision to build all these global data centers, to deploy this technology and to do it fast.”

Hurd said moving to the cloud requires three things: A solid, differentiated product, capital to invest in the infrastructure to deliver that product, and patience.

“Look at us, we spent three years with basically flat earnings per share, and this is not the formula for being admired by the investment community,” Hurd said. “You have to have the ability to deal with that.”

“It’s like the hotel business,” he added. “The problem with the cloud is, you have to build a hotel and it’s got to be finished before you can rent any rooms. While the hotel is going up, there’s no revenue. Once the hotel is finished, you can start renting rooms. So you have to be able to sustain that while you’re going through the process, and there’s no quick way through it.”

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Hurd claimed that not all of Oracle’s competitors have pushed as hard into cloud services, and it wasn’t a foregone conclusion that Oracle would, either. But he saw the years-long transition as a necessary process to protect the business from being disrupted by more nimble startups.

“Our strategy was, ‘Let’s do this right, and do it as fast as we can do it right, and get this behind us,’” he said.

Hurd estimated that cloud services account for only $50 billion in revenue across the multi-trillion-dollar enterprise industry, but that that number is growing faster than anything else in the field. Part of the transition has been unlearning certain ingrained habits.

“We historically used to write big contracts,” Hurd gave as an example. “Now we’re going to do a contract with a company that’s a startup. We’re going to go contract with Lyft for financials, but Lyft doesn’t have a procurement department. They don’t have even an IT department, per se. We can’t show up with a bunch of lawyers and a big, thick document. So we changed our process to go to ‘click to accept.’”

“That single decision, around here, is like, ‘You’ve got to be kidding,’” he added. “It’s just the way we’ve been trained, it’s what’s in our DNA.”

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This article originally appeared on Recode.net.